The Consumer Financial Protection Bureau is looking into how it can apply existing privacy and consumer protections laws to emerging digital payments offered through Big Tech, as well as stablecoins and other cryptocurrencies.
The watchdog has put out a request for public input into how it can strengthen protections for users of digital payments that do not go through banks and credit unions.
It is asking for comment to on how companies that offer or provide consumer financial products or services collect, use, share, and protect consumers’ personal financial data, including that harvested from payments.
Pervious CFPB research found that these payment mechanisms collect and use data "in excess of what is needed to initiate and complete a transaction". This data can be matched with a range of other data about a consumer, including their location, social networking, and browsing history.
The regulator warns that this data "could be used in ways that allow payments companies to facilitate personalised pricing, where a price is based on factors specific to an individual consumer".
In addition, the CFPB is proposing an interpretive rule on how the Electronic Fund Transfer Act, which provides consumers with protections against errors and fraud, would apply to new digital payment mechanisms such as those offered through large tech companies and video gaming platforms, as well as stablecoins and other digital currencies that are not widely used today in consumer transactions.
“When people pay for their family expenses using new forms of digital payments, they must be confident that their transactions are not tainted by harmful surveillance or errors,” says CFPB Director Rohit Chopra.